Portfolio advisory: managing lending books

Many banks have portfolios of loans to retail, SMEs and large corporate customers. Some parts of these portfolios may well be performing poorly given current economic conditions – but there is value locked up in these positions. Using an experienced adviser can help you realise the potential of the portfolio - working out and disposing of those parts which should not be retained, and helping to define and develop the core business.

Potential issues

Your SME and retail portfolios involve large amounts of data, and you need reporting systems to deal with current market situations.

You need to ensure that workout groups are performing well, to make sure that the correct strategies are being implemented and to sell off loans where no more can be collected economically.

You are concerned about potential fraud:Large corporate exposures pose individual problems – especially when discussions with the borrower are failing, the situation is not transparent, and business owners have little more to lose.

You need experienced advice on taking charge of your loan books and working through them systematically.

Services we offer

PwC has a global platform to help banks with their loan portfolios wherever they are, and whatever type of loans they have. Our clients range from the largest universal international banks to regional and emerging market institutions.

For portfolios of larger loans, we help banks to segment their books and to identify exit and recovery strategies in a systematic and transparent way. We help banks to implement debt forgiveness programmes mitigating fraud potential through proper reporting and surveillance. We help them to understand their clients and to work out a way forward with stakeholders.

For SME and retail portfolios, we help implement systems to assess the performance of workout groups and to make decisions about collections and disposal strategies.

For all types of portfolios, we help our clients to dispose of loans to the market. Our regional team covers over 100 active investors, and typically we have over USD 10bn face value in mandates at any one time.

Benefits for our clients

While dealing with defaulted loans is painful for any financial institution, it cannot be ignored. Developing a systematic and controlled approach to recovery is the best way forward – and we have the tools to do this.

With our support, clients improve the efficiency of their workout groups, mitigate the risk of losses through fraud, and recover cash by selling loans into the market.